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Economic and Social Developments in Western Asia for 2005-2006


UN-ESCWA has published the “Survey of Economic and Social Developments in Western Asia, 2005-2006”. The annual publication outlines a set of economic policy principles aimed at contributing to the design of development strategies in the region. The principles are employment-intensive, pro-poor and based on human rights. The Survey was completed before the conflict in Lebanon of July-August 2006. Consequently, some of the economic indicators set forth in this year’s publication, particularly with regard to Lebanon, will need to be revised in a subsequent issue.

The focus and objectives of this year’s Survey are clearly unconventional. In recent decades, macroeconomic policy has become increasingly concerned with ensuring macroeconomic stability, while growth and poverty reduction were perceived as derived goals. This approach is rejected here. It is postulated, instead, that poverty-reduction objectives need to act as the basis of national economic policymaking and play a central role in the selection of the development strategy of the UN-ESCWA region. In policy terms, this approach to development draws upon the rapidly expanding pro-poor economic policy tradition and, more broadly, on the right-to-development approach.

The literatures, their linkages and their policy implications for the UN-ESCWA region are explained and discussed in detail in the chapters of the study. At a more specific level, the publication examines the interaction between employment, poverty and economic policy, particularly fiscal, financial, monetary and exchange rate policies. These topics are themselves quite broad. Selectivity was essential in order to identify practical policy options for specific countries or groups of countries within the UN-ESCWA region, and the institutional means of generating more employment-intensive growth in these countries to satisfy the Millennium Development Goals (MDGs) and other human development goals as rapidly as possible.

The Survey considers these goals both worthwhile and urgent, given the extremely high rates of unemployment prevailing in the UN-ESCWA region and the patterns of inequality that have been entrenched over long periods in most countries. It has been estimated that the region needs to create 35 million decent jobs during the next decade in order to meet its right-to-development targets. This goal is complicated by the coexistence of complex patterns of high unemployment with labour export between countries in the UN-ESCWA region, and between these countries and other regions of the world. It could be argued that several countries in the region are in an unemployment trap being perpetuated by an undesirable and ultimately risk-enhancing policy compact. Current policies tend to do little to address these urgent problems and are incompatible with the MDGs and militate against international human rights covenants.

Achieving the ambitious objectives outlined above will require much higher, labour-absorbing growth rates than those experienced in the recent past, asserts the Survey. However, even this will not be sufficient. There is a vital need for a structural shift in the economic strategy of most UN-ESCWA member countries, which will involve a more enabling policy environment, as well as the qualitative transformation of the social and political conditions underpinning the process of growth. It will be necessary, in particular, to transform the regional security environment, enhance the efficiency of investment, and increase substantially regional cooperation with a view to securing rapid and employment-intensive economic growth, and to achieving human development outcomes. These policy adjustments are urgent. Securing the achievement of the region’s human development commitments and upholding the human rights covenants to which countries in the area have signed require significant economic policy adjustments and, at a deeper level, the commitment and determination of national governments and the existing supranational institutions.

The publication notes that this strategic policy shift will require political resolve as well as domestic and external support. However, these stringent requirements can be satisfied through a combination of domestic political mobilization around clearly defined and achievable targets, and careful use of the region’s unrivalled strategic value. While this is a complex exercise, governments in the region cannot afford to be lax. It is imperative to address the problems of unemployment and growth in the UN-ESCWA region precisely because this part of the world is critically important for global economic and political stability. In addition, UN-ESCWA member countries must address seriously their international commitments to the elimination of poverty and gross forms of inequality. The choice of economic policy at the national level must be guided by these commitments and by the imperative to raise social welfare levels as rapidly as possible.

The Survey states that mainstream one-size-fits-all policies have systematically failed to contribute to the achievement of these goals and have, consequently, worsened the problems of poverty, deprivation and unemployment in the UN-ESCWA region. These policies need to be discarded, and pro-poor and rights-based policies must be deployed instead. By the same token, security imperatives or historical links with larger countries or economic areas must not be allowed to influence unduly policy choices. Indeed, excessive concern with short-term geopolitical allegiances can impair the capacity of UN-ESCWA member countries to address their pressing domestic economic problems. This will inevitably increase insecurity in the region and reduce the policy space available for the implementation of pro-poor economic policy priorities.

The publication comprises eight chapters, namely: recent economic trends and developments in the UN-ESCWA region; rights-based and pro-poor economic policies; broad principles of rights-based economic strategies for the UN-ESCWA region; reviews of specific policy issues in the UN-ESCWA region, including poverty and distribution, employment generation, savings and investment, as well as fiscal, monetary, anti-inflation, balance of payments, and exchange rate policies; income inequality and poverty reduction; role of public policies in the UN-ESCWA region; social aspects of the right to development; and its conclusions.

The Survey of Economic and Social Developments in Western Asia concludes that the post-independence institutional structure reconditioned by wars or the prospects of war attenuates progress towards the right to development in the UN-ESCWA region. In this region, the right to development is synonymous with the right to security, which can only arise as a result of international collaboration and which, in the wake of the invasion of Iraq, is of immense importance to global stability.